Genworth to Sell European Mortgage-Insurance Business

Genworth Financial Inc. agreed to sell its European mortgage-insurance business to AmTrust Financial Services Inc. for about $60 million in cash.

Based in the U.K., the mortgage-insurance business offers products in the U.K., Finland, Italy and Germany. As of June 30, the tangible book value of the operations were about $155 million.

Genworth said earlier this year that it planned to sell some operations as part of a move to comply with tighter federal requirements for mortgage insurers that want to do business with Fannie Mae and Freddie Mac. Genworth officials estimated they needed an additional $500 million to $700 million to met the Private Mortgage Insurer Eligibility Requirements by Dec. 31.

The Richmond, Va., insurer said Tuesday's sale will provide it with additional capital credit toward the requirements. It expects to record an a loss of about $140 million related to the sale in the fourth quarter, and the deal is expected to close in the first quarter.

As for Amtrust, the company said the deal comes as the market conditions for mortgage insurance in Europe are improving.

Write to Lauren Pollock at [e-mail]

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(END) Dow Jones Newswires

October 27, 2015 08:35 ET (12:35 GMT)

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